Selling Your Home May Be Pricier Than You Expect

It’s a seller’s market, for sure, with tight housing markets across the country and home values that have risen 7.6% in the last year alone, according to Zillow. But if you’re thinking of cashing in your chips and recouping some of the value you’ve gained in your homestead by selling it, you should know that selling a house can cost more than $18,000.

In fact, the average homeowner spends $18,342 to sell their home, according to Zillow and Thumbtack’s 2018 Hidden Costs of Selling analysis.

That number has grown over time as home prices have steadily increased. “The past three to four years in U.S. housing have seen exceptional home value appreciation, to the point where we are now beyond those pre-recession peaks,” says Skylar Olsen, senior economist with Zillow who conducted the analysis.

The biggest chunk of sales costs is made up of agent commissions and transfer or sales taxes ($13,357). “Your biggest ticket items are going to be that estimated closing costs column,” Olsen says. In terms of agent’s fees, typical costs include 3% of the sale price to the seller’s agent and another 3% to the buyer’s agent. As your home increases in value, so do your agent’s fees.

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“But as your home increases in value, your ability to absorb those costs is also increasing,” Olsen says.

It’s important also to keep in mind that agent’s fees aren’t set in stone. “Those are social standards, which means you can negotiate those rates with your agent,” Olsen says. “Right now, a lot of agents are hungry to work with sellers because inventory is so restrained. You, as a seller, can be in a strong bargaining position.”

And it’s just an average. In some markets, costs are much higher—or lower. Homeowners in San Jose, for instance, pay median closing costs of $74,927, due to property values there, while those in Pittsburgh pay $8,322.

In addition to closing costs, there are also the expenses associated with getting your home ready for sale, from painting and cleaning to moving costs. Nationally, the average homeowner pays $4,985 for these sorts of projects.

While it’s unlikely that you can trim much fat from your closing costs, you might be able to save some cash on home prep. “You can do a lot of the basic home prep on your own,” Olsen says. “What drives the difference in cost from place to place is the cost of labor. If you want to value your time in a way that you’re willing to use your own labor, then you can save money.”